SMSFJoint Venture With Me in Property Development?

Viewing 4 posts - 1 through 4 (of 4 total)

drob1978
Member
@drob1978
Join Date: 2009
Post Count: 1
October 30, 2009 - 12:20 am
Hi,
Wanting to get a general feel for whether it is at all possible to do the following
1. SMSF purchases land outright (no debt) or if necessary i purchase land with SMSF 50/50 initially
2. SMSF then goes 50/50 JV with me in building units or home or small residential whatever (small scale say 2 units but don't think that is relevenat at this stage) again with no debt
3. Say 2 units built they are owned approx 50/50 by SMSF and me
4. Can i say sell the one i own and then retain the other in the SMSF?
Wanting to know if this is at all possible either in this or another format or would it be breaching in house asset rules etc.
Thanks in advance to any contributors
Dan42
Member
@dan42
Join Date: 2008
Post Count: 619
October 30, 2009 - 12:41 am
I think you would have an issue with the In-House Asset rules.
wealth4life.com
Member
@wealth4life.com
Join Date: 2003
Post Count: 1,248
October 30, 2009 - 1:14 am
Get proper legal advise I have a great contracts lawyer k2law.com.au but be prepared to spend between 3 – $6,500.00 in legal agreements which are required …
MikeF
Participant
@mikef
Join Date: 2008
Post Count: 60
October 30, 2009 - 7:24 am
drob1978 wrote:
Hi,
Wanting to get a general feel for whether it is at all possible to do the following
1. SMSF purchases land outright (no debt) or if necessary i purchase land with SMSF 50/50 initially
2. SMSF then goes 50/50 JV with me in building units or home or small residential whatever (small scale say 2 units but don't think that is relevenat at this stage) again with no debt
3. Say 2 units built they are owned approx 50/50 by SMSF and me
4. Can i say sell the one i own and then retain the other in the SMSF?
Wanting to know if this is at all possible either in this or another format or would it be breaching in house asset rules etc.
Thanks in advance to any contributors
Hi, I'm no legal/tax expert but before you do anything I'd suggest you find one that really knows their stuff with regards the ins and outs of SMSFs particularly when they are involved in property development because this area is a minefield even for the experienced. However my understanding to your questions in general terms are;
1/ Yes
2/ Depends, possibly no.
3/ Yes
4/ Yes
The above answers (particularly the 2nd) will also depend on things such as how your SMSF Trust Deed and Investment Strategy documents are worded and whether the ATO will see this as an SMSF running a property development business as this could possibly make your fund non-compliant (ie breaching the sole purpose test).
PLEASE note comments made should NOT be taken as specific taxation, financial, legal or investment advice. Please seek professional, specific advice.
MikeF